$100 A Barrel Oil is on the Way

#351
#351
I wouldn't say complaining about it = whining.

I would say that seeking price controls, windfall profit taxes, blaming oil companies, etc. is the wrong approach.
 
#352
#352
volinbham said:
I wouldn't say complaining about it = whining.

I would say that seeking price controls, windfall profit taxes, blaming oil companies, etc. is the wrong approach.
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I know you're not saying it, but some act like you shouldn't be able to vent.

There are solutions to the problem, but I doubt very seriously it will happen. (drilling, refineries, lower taxes etc etc)
 
#353
#353
Is the reason that we do not see more refineries because margin is everything to the refineries? I mean...if the volume processed at a refinery were to actually decrease, would their profit evaporate? So...that would mean that (from an elementary viewpoint) to keep profits at least constant at the refineries, then the pace of refinery growth could match but not exceed the rate of growth of consumption?
 
#354
#354
TennTradition said:
Is the reason that we do not see more refineries because margin is everything to the refineries? I mean...if the volume processed at a refinery were to actually decrease, would their profit evaporate? So...that would mean that (from an elementary viewpoint) to keep profits at least constant at the refineries, then the pace of refinery growth could match but not exceed the rate of growth of consumption?
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the crack spreads are negative at most refineries no meaning that most are losing money. it's the crude price that is the problem and most of that is due to speculation and the week dollar.
 
#355
#355
droski said:
the crack spreads are negative at most refineries no meaning that most are losing money. it's the crude price that is the problem and most of that is due to speculation and the week dollar.
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Yeah...I know that speculation is one of the killers, of of course the weak dollar. You mention the crack spreads...but that is only a portion of the crude to use process, right? I'm just trying to get handle on the fact that if prices come back down - we still won't see more refineries (I would guess)....and this must mean that the profits margin is low and everything is volume....but, this wouldn't be the first time I was wrong about an economic matter...
 
#356
#356
I see gas prices are up over $1 since the date Pelosi became Speaker. Good job on those campaign issues you ran on.
 
#357
#357
Why don't we come up with an alternative to oil? Answer because there is no real viable alternative. Everything else is way too expensive to implement. Open up the oil here to drilling and build some damn refineries and get us off foreign oil as much as we can.
 
#358
#358
It's still hard to get around world demand, especially China and India. This from a NYT article dated 11/7/07:

"Over the last two years, China and India accounted for about 70 percent of the increase in energy demand..."

If interested the whole article is here:

http://www.nytimes.com/2007/11/07/business/07cnd-energy.html

And it's not like the rest of the world's energy demands are exactly ebbing.
 
#359
#359
TennTradition said:
Yeah...I know that speculation is one of the killers, of of course the weak dollar. You mention the crack spreads...but that is only a portion of the crude to use process, right? I'm just trying to get handle on the fact that if prices come back down - we still won't see more refineries (I would guess)....and this must mean that the profits margin is low and everything is volume....but, this wouldn't be the first time I was wrong about an economic matter...
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my understanding is when they refine crude they get both gas and heating oil. the crack spread is the price difference between crude and gas. the fact is that it's very hard to build new refineries because of political reasons but refineries are producing far more today than they did even 10 years ago.
 
#360
#360
Just my 2 cents on the refinery issue. It is a highly capital (fixed capital) intensive industry. Margins can be volatile. Until the last few years, margins were very thin. They had a few record profit margin years but margins just as easily can shrink to virtually nothing. Add the environmental risks and hurdles plus the long time horizon to bring one online and you have a very risky investment.
 
#361
#361
KB5252 said:
Why don't we come up with an alternative to oil? Answer because there is no real viable alternative. Everything else is way too expensive to implement. Open up the oil here to drilling and build some damn refineries and get us off foreign oil as much as we can.
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because you have a bunch of tree hugging idiots here at home that pitch a fit if the issue is ever brought up...dang al gore's kin folks i tell ya
 
#363
#363
allvol123 said:
Diesel...$4 a gallon in Nashville. Price of everything going up.
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I work for a company that sells stone for building and architectural purposes in Nashville. We have had to go up on prices for just about everything here because of freight. Not to mention our equipment we run on our site.
 
#364
#364
Yea...the product I sell has pretty thin margins...transportation costs do hurt. Don't see it getting better.
 
#365
#365
If Oil breaks the 120 mark and builds a base there, then I think we might be in trouble. It could be off to the races fast.
 
#366
#366
#367
#367
myrobbins7 said:
If Oil breaks the 120 mark and builds a base there, then I think we might be in trouble. It could be off to the races fast.
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This makes no sense to me, though...the non-speculative price, or "real" price, has to be closer to $80 to $85 a barrel...this is just nuts.
 
#368
#368
TennTradition said:
This makes no sense to me, though...the non-speculative price, or "real" price, has to be closer to $80 to $85 a barrel...this is just nuts.
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I know man, it is crazy. Goldman put out a report about a month ago saying oil was going to $200. Looks like they might be on to something. When everyone was saying it wasn't going to make to $100 Goldman said buy. They are still saying oil is cheap to buy, but I sold out @ $105 & @ $110. I hold a little now ,but I just don't see it getting to $200. I could be wrong but, if it does hit $200 that would hurt alot of folks.
 
#369
#369
myrobbins7 said:
I know man, it is crazy. Goldman put out a report about a month ago saying oil was going to $200. Looks like they might be on to something. When everyone was saying it wasn't going to make to $100 Goldman said buy. They are still saying oil is cheap to buy, but I sold out @ $105 & @ $110. I hold a little now ,but I just don't see it getting to $200. I could be wrong but, if it does hit $200 that would hurt alot of folks.
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Huge understatement, IMO. Just look at diesel prices....prices of everything are going to get insane if that happens. Can you imagine food prices with $200/barrell oil and increased corn/soy usage in ethanol and bio-diesel. That could be scary, IMO.
 
#370
#370
TennTradition said:
Huge understatement, IMO. Just look at diesel prices....prices of everything are going to get insane if that happens. Can you imagine food prices with $200/barrell oil and increased corn/soy usage in ethanol and bio-diesel. That could be scary, IMO.
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I think even you are understating that. I'm not aware of any realistic assessments of the domino effect of such a thing but I can see food shortages and riots in some urban environs if that were to take place. What is your best guess as to the emergency reaction of the government if faced with such a thing?
 
#371
#371
TennTradition said:
Huge understatement, IMO. Just look at diesel prices....prices of everything are going to get insane if that happens. Can you imagine food prices with $200/barrell oil and increased corn/soy usage in ethanol and bio-diesel. That could be scary, IMO.
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I agree TT, food prices have already gone way up as it is now. With $200 a barrell, I think it would push the prices even higher and that's not a good thing for most Americans at this point and time.
 
#372
#372
I'm still trying to figure out why a weak dollar is good for the economy. I know it makes US-made products cheaper overseas, but it's not exactly helping me out in my day to day living.
 
#373
#373
hndog609 said:
I think even you are understating that. I'm not aware of any realistic assessments of the domino effect of such a thing but I can see food shortages and riots in some urban environs if that were to take place. What is your best guess as to the emergency reaction of the government if faced with such a thing?
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Federal transportation subsidy on transport of food and items of necessity. I would also have to imagine that if the government sees this happen, they will place an emergency repeal on ethanol subsidies to loosen the supply for food. But...I really don't know. It's a very good question...I may have to see what I can dig up on that one...Actually, I was lucky enough to have lunch with the Secretary of Energy last week (not just me of course...it was a group of 20 or so)...I would have loved to have had this question on my mind then. He was very frank and answered our questions in detail over lunch...I would have loved to see what he would have said to this....I think it would have been very interesting...
 
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